Eaton Vance Michigan Municipal Income Trust

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

811-09153

Investment Company Act File Number

Eaton Vance Michigan Municipal Income Trust

(Exact Name of Registrant as Specified in Charter)

Two International Place, Boston, Massachusetts 02110

(Address of Principal Executive Offices)

Maureen A. Gemma

Two International Place, Boston, Massachusetts 02110

(Name and Address of Agent for Services)

(617) 482-8260

(Registrant’s Telephone Number, Including Area Code)

November 30

Date of Fiscal Year End

August 31, 2013

Date of Reporting Period

 

 

 


Item 1. Schedule of Investments


Eaton Vance

Michigan Municipal Income Trust

August 31, 2013

PORTFOLIO OF INVESTMENTS (Unaudited)

Tax-Exempt Investments — 165.4%

 

                                                 
Security    Principal
Amount
(000’s omitted)
     Value  

Bond Bank — 4.5%

     

Michigan Municipal Bond Authority, 5.00%, 10/1/29

   $ 600       $ 639,312   

Michigan Municipal Bond Authority, 5.00%, 10/1/30

     500         523,185   
     

 

 

 
      $ 1,162,497   
     

 

 

 

Education — 16.0%

     

Grand Valley State University, 5.625%, 12/1/29

   $ 525       $ 558,653   

Grand Valley State University, 5.75%, 12/1/34

     525         564,569   

Michigan State University, 5.00%, 2/15/40

     1,000         1,004,910   

Michigan State University, 5.00%, 2/15/44

     460         459,991   

Michigan Technological University, 4.00%, 10/1/36

     700         584,514   

Oakland University, 5.00%, 3/1/42

     500         480,910   

Wayne State University, 5.00%, 11/15/40

     500         489,765   
     

 

 

 
      $ 4,143,312   
     

 

 

 

Electric Utilities — 4.9%

     

Lansing Board of Water and Light, 5.50%, 7/1/41

   $ 500       $ 523,930   

Michigan Public Power Agency, 5.00%, 1/1/43

     800         745,320   
     

 

 

 
      $ 1,269,250   
     

 

 

 

Escrowed/Prerefunded — 2.2%

     

Macomb County Hospital Finance Authority, (Mount Clemens General Hospital), Prerefunded to 11/15/13, 5.875%, 11/15/34

   $ 560       $ 566,535   
     

 

 

 
      $ 566,535   
     

 

 

 

General Obligations — 44.4%

     

Allegan Public Schools, 5.00%, 5/1/31

   $ 1,000       $ 1,001,820   

Ann Arbor Public Schools, 4.50%, 5/1/24

     350         363,262   

Bloomfield Hills Schools, 4.00%, 5/1/37

     750         669,540   

Comstock Park Public Schools, 5.00%, 5/1/28

     230         235,129   

Comstock Park Public Schools, 5.125%, 5/1/31

     275         278,548   

Comstock Park Public Schools, 5.25%, 5/1/33

     220         222,893   

HealthSource Saginaw, Inc., Saginaw County, 4.00%, 5/1/29

     500         459,900   

Howell Public Schools, 4.50%, 5/1/29

     620         617,892   

Jenison Public Schools, 5.00%, 5/1/28

     500         506,320   

Jenison Public Schools, 5.00%, 5/1/30

     500         500,280   

Kent County, 5.00%, 1/1/25

     1,500         1,585,380   

Kent County, (AMT), 5.00%, 1/1/28

     1,000         1,030,650   

Livingston County, 4.00%, 6/1/28

     310         292,125   

Livingston County, 4.00%, 6/1/30

     335         310,200   

Michigan, 5.00%, 11/1/20

     1,000         1,153,280   

Michigan, 5.50%, 11/1/25

     270         296,517   

Northview Public Schools, 5.00%, 5/1/32

     725         733,555   

Northview Public Schools, 5.00%, 5/1/41

     275         277,464   

St. Clair County, (Convention Center), 3.75%, 4/1/42

     375         283,005   

Whitmore Lake Public School District, 4.00%, 5/1/32

     750         647,557   
     

 

 

 
      $ 11,465,317   
     

 

 

 

Hospital — 27.8%

     

Gaylord Hospital Finance Authority, (Otsego Memorial Hospital Association), 6.20%, 1/1/25

   $ 185       $ 185,468   

Gaylord Hospital Finance Authority, (Otsego Memorial Hospital Association), 6.50%, 1/1/37

     125         123,654   

Kent Hospital Finance Authority, (Spectrum Health), 5.50% to 1/15/15 (Put Date), 1/15/47

     275         292,289   

 

1

 

 


                                                 
Security    Principal
Amount
(000’s omitted)
     Value  

Mecosta County, (Michigan General Hospital), 6.00%, 5/15/18

   $ 310       $ 310,282   

Michigan Finance Authority, (Oakwood Obligated Group), 5.00%, 11/1/32

     500         474,830   

Michigan Hospital Finance Authority, (Henry Ford Health System), 5.00%, 11/15/38

     675         615,931   

Michigan Hospital Finance Authority, (Henry Ford Health System), 5.25%, 11/15/46

     1,000         932,170   

Michigan Hospital Finance Authority, (McLaren Health Care), 5.00%, 6/1/35

     250         237,272   

Michigan Hospital Finance Authority, (McLaren Health Care), 5.00%, 8/1/35

     1,080         1,061,608   

Michigan Hospital Finance Authority, (MidMichigan Obligated Group), 6.125%, 6/1/39

     500         519,550   

Michigan Hospital Finance Authority, (Trinity Health Corp.), 5.00%, 12/1/27

     1,000         1,028,710   

Monroe County Hospital Finance Authority, (Mercy Memorial Hospital Corp.), 5.375%, 6/1/26

     425         436,250   

Saginaw Hospital Finance Authority, (Covenant Medical Center, Inc.), 5.00%, 7/1/30

     1,000         960,870   
     

 

 

 
      $ 7,178,884   
     

 

 

 

Housing — 1.0%

     

Michigan Housing Development Authority, 4.60%, 12/1/26

   $ 265       $ 258,412   
     

 

 

 
      $ 258,412   
     

 

 

 

Industrial Development Revenue — 2.6%

     

Detroit Local Development Finance Authority, (Chrysler Corp.), 5.375%, 5/1/21

   $ 750       $ 660,825   
     

 

 

 
      $ 660,825   
     

 

 

 

Insured-Education — 5.4%

     

Ferris State University, (AGC), 5.125%, 10/1/33

   $ 570       $ 577,222   

Ferris State University, (AGC), 5.25%, 10/1/38

     500         506,940   

Wayne State University, (AGM), 5.00%, 11/15/35

     300         301,752   
     

 

 

 
      $ 1,385,914   
     

 

 

 

Insured-Electric Utilities — 3.1%

     

Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/29

   $ 630       $ 491,028   

Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/32

     250         190,408   

Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/34

     155         116,400   
     

 

 

 
      $ 797,836   
     

 

 

 

Insured-General Obligations — 17.6%

     

Battle Creek School District, (AGM), 5.00%, 5/1/37

   $ 1,105       $ 1,107,497   

Byron Center Public Schools, (AGM), 3.75%, 5/1/26

     650         602,303   

Byron Center Public Schools, (AGM), 4.00%, 5/1/28

     290         267,482   

Detroit School District, (AGM), 5.25%, 5/1/32

     300         282,288   

Hartland Consolidated Schools, (AGM), 5.25%, 5/1/29

     1,000         1,044,830   

Van Dyke Public Schools, (AGM), 5.00%, 5/1/38

     1,250         1,250,425   
     

 

 

 
      $ 4,554,825   
     

 

 

 

Insured-Lease Revenue/Certificates of Participation — 8.0%

     

Michigan Building Authority, (AGM), (FGIC), 0.00%, 10/15/29

   $ 1,000       $ 403,650   

Michigan Building Authority, (NPFG), 0.00%, 10/15/30

     4,300         1,656,102   
     

 

 

 
   $ 2,059,752   
     

 

 

 

Insured-Special Tax Revenue — 0.3%

     

Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45

   $ 895       $ 87,370   
     

 

 

 
   $ 87,370   
     

 

 

 

Insured-Transportation — 4.0%

     

Wayne County Airport Authority, (AGC), (AMT), 5.375%, 12/1/32

   $ 1,000       $ 1,029,850   
     

 

 

 
   $ 1,029,850   
     

 

 

 

Insured-Water and Sewer — 11.6%

     

Detroit, Sewage Disposal System, (AGC), (FGIC), 5.00%, 7/1/36

   $ 560       $ 488,930   

Detroit, Water Supply System, (NPFG), 5.00%, 7/1/30

     1,650         1,473,285   

Grand Rapids, Water Supply System, (AGC), 5.10%, 1/1/39

     1,000         1,030,030   
     

 

 

 
   $ 2,992,245   
     

 

 

 

 

2

 

 


                                                 
Security    Principal
Amount
(000’s omitted)
     Value  

Special Tax Revenue — 5.3%

     

Guam, Limited Obligation Bonds, 5.625%, 12/1/29

   $ 115       $ 117,816   

Guam, Limited Obligation Bonds, 5.75%, 12/1/34

     125         127,816   

Michigan Trunk Line Fund, 5.00%, 11/15/36

     1,000         999,920   

Virgin Islands Public Finance Authority, 6.75%, 10/1/37

     110         120,139   
     

 

 

 
   $ 1,365,691   
     

 

 

 

Water and Sewer — 6.7%

     

Detroit, Water Supply System, 5.25%, 7/1/41

   $ 750       $ 643,680   

Grand Rapids, Sanitary Sewer System, 5.00%, 1/1/28

     790         830,495   

Port Huron, Water Supply System, 5.25%, 10/1/31

     250         247,685   
     

 

 

 
   $ 1,721,860   
     

 

 

 

Total Tax-Exempt Investments — 165.4%
(identified cost $44,449,681)

      $ 42,700,375   
     

 

 

 

Auction Preferred Shares Plus Cumulative Unpaid Dividends — (67.8)%

  

   $ (17,500,141
     

 

 

 

Other Assets, Less Liabilities — 2.4%

  

   $ 620,553   
     

 

 

 

Net Assets Applicable to Common Shares — 100.0%

  

   $ 25,820,787   
     

 

 

 

The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.

 

AGC

  -   Assured Guaranty Corp.

AGM

  -   Assured Guaranty Municipal Corp.

AMT

  -   Interest earned from these securities may be considered a tax preference item for purposes of the Federal Alternative Minimum Tax.

FGIC

  -   Financial Guaranty Insurance Company

NPFG

  -   National Public Finance Guaranty Corp.

The Trust invests primarily in debt securities issued by Michigan municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at August 31, 2013, 30.2% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution or financial guaranty assurance agency ranged from 2.1% to 12.3% of total investments.

A summary of open financial instruments at August 31, 2013 is as follows:

Futures Contracts

 

Expiration
Month/Year
  

Contracts

   Position    Aggregate Cost     Value     Net Unrealized
Depreciation
 
12/13    7 U.S. Long Treasury Bond    Short    $     (915,683   $     (923,344   $     (7,661

At August 31, 2013, the Trust had sufficient cash and/or securities to cover commitments under these contracts.

The Trust is subject to interest rate risk in the normal course of pursuing its investment objective. Because the Trust holds fixed-rate bonds, the value of these bonds may decrease if interest rates rise. The Trust purchases and sells U.S. Treasury futures contracts to hedge against changes in interest rates.

At August 31, 2013, the aggregate fair value of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in a liability position and whose primary underlying risk exposure is interest rate risk was $7,661.

 

3

 

 


The cost and unrealized appreciation (depreciation) of investments of the Trust at August 31, 2013, as determined on a federal income tax basis, were as follows:

 

Aggregate cost

   $     44,401,465   
  

 

 

 

Gross unrealized appreciation

   $ 676,359   

Gross unrealized depreciation

     (2,377,449
  

 

 

 

Net unrealized depreciation

   $ (1,701,090
  

 

 

 

Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

 

 

Level 1 — quoted prices in active markets for identical investments

 

 

Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

 

 

Level 3 — significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments)

In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

At August 31, 2013, the hierarchy of inputs used in valuing the Trust’s investments and open derivative instruments, which are carried at value, were as follows:

 

Asset Description    Level 1     Level 2      Level 3      Total  

Tax-Exempt Investments

   $      $ 42,700,375       $       $     42,700,375   

Total Investments

   $      $     42,700,375       $       $ 42,700,375   
Liability Description                               

Futures Contracts

   $ (7,661   $       $       $ (7,661

Total

   $     (7,661   $       $     —       $ (7,661

The Trust held no investments or other financial instruments as of November 30, 2012 whose fair value was determined using Level 3 inputs. At August 31, 2013, there were no investments transferred between Level 1 and Level 2 during the fiscal year to date then ended.

For information on the Trust’s policy regarding the valuation of investments and other significant accounting policies, please refer to the Trust’s most recent financial statements included in its semiannual or annual report to shareholders.

 

4

 

 


Item 2. Controls and Procedures

(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant on this Form N-Q has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant on this Form N-Q has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

(b) There have been no changes in the registrant’s internal controls over financial reporting during the fiscal quarter for which the report is being filed that have materially affected, or are reasonably likely to materially affect the registrant’s internal control over financial reporting.


Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Eaton Vance Michigan Municipal Income Trust

 

By:   /s/ Cynthia J. Clemson
  Cynthia J. Clemson
  President
Date:   October 25, 2013

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:   /s/ Cynthia J. Clemson
  Cynthia J. Clemson
  President
Date:   October 25, 2013

 

By:   /s/ James F. Kirchner
  James F. Kirchner
  Treasurer
Date:   October 25, 2013